the effects of firm-generated content (FGC) in social media on customer
behavior. We find that FGC has a significant, positive effect on customers’
spending, cross-buying, and profitability. We also find FGC has synergistic
effect with traditional (e.g., TV Ad) and digital media (e.g., e-mail).
"Our study suggests a synergistic relationship between social and other media used for marketing communications—television and e-mails. As social media gains importance, managers must take care to not abandon other forms of advertising as television and email marketing.”
“The return on investment in ‘social CRM’ is determined not only by a firm’s investment in social media but also by consumers’ level of engagement with the firms’ social media page. Therefore, customer engagement in firm's social media sites is very important for 'social CRM' to be effective.”
With the dramatic change in the media landscape in recent
years, firms have embraced social media as a means to engage with their
customers. However, at the same time, marketing managers are concerned about
measuring the returns on investment from social media. In this study, we
examine the effect of social media engagement on customer purchase behavior by
studying the effect of firm generated content in its official social media
pages on three key customer metrics: customer spending, cross-buying and customer
We use micro-level customer data compiled from multiple
sources: social media participation data, transaction data, and survey
data. Leveraging this unique data set,
we study the effect of customer engagement via social media on three customer
metrics: spending, cross-buying and profitability. We build our arguments regarding
the positive effects of FGC on customer behaviors using extant literature on
multichannel marketing, integrated marketing communications (IMC), and digital
marketing and take an empirical approach using methods such as
difference-in-differences (DID) and treatment effect (TE) models.
We find that after controlling for the main effects of
television advertising and e-mail marketing and after ruling out the issue of
customer self-selection, firm-generated content (FGC) has a positive and
significant effect on customer spending, cross buying and customer
profitability. We further find that FGC works synergistically with both
television advertising and email marketing. However this synergistic effect is
higher for email marketing. Our results also suggest that the effect of FGC is
greater for more experienced, technologically-savvy and more social-network
Firm-generated content through social media can positively affect
customer spending, cross-buying and customer profitability. FGC works synergistically
with traditional and digital media and has the maximum impact on customers who
are loyal, tech savvy, and prone to using social networks.
Social media platforms have become an effective tool for
firms to create connectivity with their customers. However, it is only through
communication that they can create a meaningful relationship with customers.
Therefore, firm generated content (FGC) in social media is crucial in nurturing
this relationship. Furthermore, in this online social media environment, the
role of traditional and other digital media cannot be undermined, as they have
synergistic effects with FGC. The results from this study are applicable to both
small as well large firms that use social media marketing.
Ashish Kumar, Ram Bezawada, Rishika Rishika, Ramkumar Janakiraman, and P.K. Kannan (2016), "From Social to Sale: The Effects of Firm-Generated Content in Social Media on Customer Behavior," Journal of Marketing, 80 (1), 7-25
Ashish Kumar is Assistant Professor of
Marketing, School of Business, Aalto University (e-mail: email@example.com).
Ram Bezawada is
Visiting Associate Professor, Indian School of Business, and Associate
Professor of Marketing, School of Management, State University of New York,
Buffalo (e-mail: firstname.lastname@example.org).
Rishika Rishika is
Clinical Assistant Professor of Marketing, Darla Moore School of Business,
University of South Carolina (e-mail:email@example.com).
is Associate Professor of Marketing and Business Partnership Foundation
Research Fellow, Darla Moore School of Business, University of South Carolina
P.K. Kannan is Ralph
J. Tyser Professor of Marketing Science, Robert H. Smith School of Business,
University of Maryland (e-mail:firstname.lastname@example.org).